The Power of Referral Marketing

Today I’m gonna touch on something I do a lot. And very much believe in.

I know of a lot of people who insist on doing the sales and marketing themselves.

You know what’s the reason?

Because they  say they get less profits.

You know what I say to that? Absolute hogwash!

Sure..you keep 100% of the profits, But is it scalable? Do you think you can get exponential sales growth if there is only you yourself doing the sales and pitching? Or if there are 100 other motivated affiliates and partners pushing for you?

Make no mistake about it. If you want to make more sales…and more profits – then you gotta work out referral system to get people to sell for you.

Joe Girard is a legendary car salesman. He still holds the world record for most number of cars sold. Did he do all the selling himself? Hell no. He got tonnes of referrals who do the ‘pitching’ for him.

From satisfied customers who spread the ‘word-of-mouth’ for him to referrers who are paid a commission.

Make no mistakes about it – referral marketing is powerful. It’s scalable and it’s allows you to build sales fast – without having to take on a lot of risk.

You just simply pay a commission cut upon a successful sale. It’s as simple as that. There will be people who will be motivated by the monetary incentive to want to sell for you.

To take the referral marketing strategy even further, offer a 2nd tier cut.

So now, you get people who will get MORE partners for you who can refer sales to you.

That’s very very powerful.

I get a lot of important contacts I would never have met, had it not been for motivated middleman who are attracted by the 2nd tier cut.

And why not? They get recurring passive income every time their downline makes a sales. Easy money and little work for them. And you as a merchant benefit from a greater sales network.

Extremely powerful stuff.

And to those who say that you will be giving profits to other people – let me say this. Without them, will you get more sales? These sales result from their effort. Not yours. So it’s sales brought to you on a platter through no effort on your own.

You just simply take a cut from the profits – that is anyway not from your effort – and giving it to the successful referrer. It’s only fair. Good deal for him. And good deal for you.

Think about it. And let me know what you think.

[tags]E-MoneyMarketing, online marketing, sales process, profit sharing[/tags]

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In the long run when you have a small army of affiliates promoting for you it leaves you much more time to do other things as support etc.
I would rather give away a portion of my profits to bring in more money than if it was me just promoting.

Bruno Augers last blog post..Basic Computer Lingo

well … i think this type of marketing is very tough … but this is also a long run process. Referral Marketing is being good but have some difficulties. :S

That’s great. It’s really informative post to share for being develop a multinational company. Thanks for sharing this in your post with us. Waiting for your next post like this.

Referral marketing is good only if u are in starting stage or Booming apart from that u made the post very easy to understand

Andrew

Tough, but once you get the hang of it, yes, it can be very profitable.

@Andrew Green:

You are never too big to rely on referral/affiliate marketing. Apple have their own affiliate program. As do Ebay. As do Dell. Even Google. Google Adsense IS an affiliate program.

They rely on the users’ referrals.

It is powerful and very much scalable – without heavy cost.

Jag

Very good power of refferak marketing

You can never go wrong with referral marketing. I have an offline business that employs this method as well as running affiliate offers that are scalable on this level.

I have noticed when I promote my own site it is more quality promotion so I usually do most all of it myself.

I agree with your point of view – referral marketing is a great way to grow your business. I think sometimes people get caught up with worry of trying to keep all the profits to themselves but it’s far better to have a big slice of a huge pie than a small pie all to yourself.

indeed. and this allows you to have more time to pursue other things, and maybe even enjoy life. :)

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@ Marketing & Advertising Strategies:

Exactly. I think you got that all summed up!

Jag

Yes that was a really useful article and reference marketing and viral marketing are really growing today.

this is also a long run process. Referral Marketing is being good but have some difficulties.

Referral marketing is extremely powerful. The site that I use to manage and exchange referrals is Referral Key. This tool focuses on building a trusted referral network. Check it out.

@ Jilian:

Referral Key looks like an interesting product. Will hop over to check it out – thoroughly.

I currently already have my own affiliate tracking backend. But having more choices doesn’t hurt. And it do seem to me that Referral keys seems a decent solution.

Jag

I’ve had first hand experience with referral marketing, and you are completely right. It’s hard to achieve greatness alone, but when you have a team behind you, things become much easier. Although you have to split the profits, you still make more than if you were alone.

I agree with you today referral marketing is great way to increase clients. your existing clients can be a good source of referral marketing. It is a method of Internet marketing that relies on gaining new customers by referrals.

Its true Affiliate Marketing is the best way create positive results. The extensive use of affiliate marketing is the low-risk nature of the program.

Best thing is treat your customer like king,provide him good service,if he is satisfied he will refer you to others also.

Referal marketing- It is also one of the best way to get good traffic. And it is preferred for only short term needed traffic.

Perlapennylopes last blog post..How to repair cracked vinyl siding

It is now one of the fastest growing endeavors on the entrepreneurial sector. Thanks for enlightening us all the more on this. I guess this is what is called networking in marketing.

I rarely give testimonials, but I consider the Power of Referral Marketing Programme the best source of referral marketing ideas, strategies and programmes available anywhere, Vince Golderis an absolute master in referral marketing.

@ Perlapennylope,

It’s short term. But you can turn it around to your benefit, by simply capturing this prospects. And turning them into your leads…or your subscribers.

They give you referrals..or traffic…then after that it is up to us to follow up.

Jag

I have to agree with most of the people here, isn’t this type of marketing much harder?

@Jordans:

I think I can explain to you by simply pointing to you one of the most successful examples of referral marketing – Google Adsense. =)

Jag

Affiliate marketing is great. Only having to pay commission on a pay for performance basis is a excellent business model.

Referral marketing has helped me grow my business from the ground up. I use a site called Referral Key to help me build and manage my referral network. Check it out.

This is an interesting and informative post. Thanks for the useful information.

I have the same idea, if we success….need extra effort…need more weapon, thanks for inspiration story

Many understand this but few adapt referral marketing system into their marketing strategy. If you can have the ideal client referred by your network of referral partners day in and day out, would you spend hard earned dollars into ineffective advertising vehicles?

If referral marketing is such a great way to go, why doesn’t every small business in the world jump right on top of the band wagon and take full advantage of this obvious tool.

Small business owners don’t use the secret weapon of referral marketing to grow their businesses, fatten their wallets, and crush their competition is fear.

Referrals are valuable but many businesses and marketers still think of them as happenstance and not as a serious marketing medium. This is a myth, and we need to be enlightened to the fact that, much like having a gym or personal trainer helps you lose weight, the proper referral system makes referral marketing a priority and after a while, it becomes second nature. We learn to take the necessary steps with every new customer, to ensure that they will tell others about our products and services.

I think sometimes people get caught up with worry of trying to keep all the profits to themselves but it’s far better to have a big slice of a huge pie than a small pie all to yourself.

- Christani

If you help your refferals earn more money they try harder and make you more. If people make little money they stop selling and you loose thier sales. It can make you alot of money but you have to build a team of people who help each other out.
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Yes exactly, We’ve to build a team of people to launch a big marketing campaign. Keeping all the profit doesn’t makes much sense.
Great stuff, thanks for sharing.
Aditya´s last blog ..Stephanie Harris, Tim Boileau, Leon Burnette and 1 more joined Virtual Edge for Virtual Events, Virtual Meetings & Communities

Referral program is a very nice way to increase your sales. You can run at least a 3-tier referral program to make most of it. It is up to you how you get the referrals, either through e-mail marketing or something else.

Hannah Jones

Referral Marketing is very essential to any business. In fact some businesses rely entirely on word of mouth for their sales instead of spending any money on marketing costs.